We propose a prospective cohort study of the relationship of health plan, medical group, and clinic characteristics to measures of chronic disease care and resource utilization for patients with diabetes mellitus (DM) or coronary heart disease (CHD). Health plan, medical group, and clinic characteristics are drawn from a conceptual model based on both health services and organizational science, and data on relevant characteristics will be sought using standardized measures whenever possible. DM and CHD are selected for study because of their high prevalence and cost, accuracy of identification, clear clinical recommendations, and likelihood that organizational factors are related to outcomes. To assure a wide range of organizational and financial variables, the sampling frame includes all adults with DM or CHD in a defined population of 700,000 patients covered by various insurance products offered by a single health plan. On site interviews, surveys, and administrative data will be used to measure relevant characteristics of 47 medical groups and 176 clinics. Detailed measures of chronic disease care and resource utilization for a random sample of 4,000 study subjects with DM and 4,000 study subjects with CHD will be collected from patient surveys, medical record reviews, and administrative data. The main analysis will use multivariate multilevel logistic regression models (MLn) to test the hypothesis that key health plan, medical group, and clinic characteristics are related to measures of chronic disease care and resource use, after controlling for important patient and provider characteristics. In addition to MLn, propensity score adjustment will be used to account for selection effects an informative censoring. Results will be relevant to policy makers, purchasers, health plans, medical groups, and clinics that are seeking to improve chronic disease care, and may suggest new intervention strategies worth further investigation.